A report has asked whether luxury renting is the new home ownership for millennials, with the dying dream of home ownership for many young people leading to a boom in alternative renting options.
The findings, carried out by research and communication firm GK Strategy, suggest that there has been huge growth in the luxury rental accommodation market for young professionals.
In the last four years, online searches in the UK for ‘co-living’ rental opportunities have grown by almost 4,000%. This is also set to increase even more as investment into the sector accelerates.
The trend for co-living – which often involves more luxury, bespoke accommodation – has boomed as the prospect of young people owning their own home has evaporated (or at the very least diminished). In the last 20 years, home ownership for middle earners aged 25-34 has dropped from 65% to just 27%.
According to GK Strategy, the struggles of the UK housing market have been to the benefit of the luxury rental accommodation sector – with growing international demand for a better kind of renting experience proving a boon to investors. Many international students, in particular, demand something more luxurious than your average student digs, with investors able to capitalise on this desire for more bespoke properties and the higher rents they can generally charge.
Some of the key players in the co-living and luxury apartments sector are Tipi, Fizzy Living and The Collective.
At present, a quarter of traffic to co-living brands websites comes from the UK, with high levels of international demand from countries such as the US - where the concept is already popular. GK Strategy predicts growing levels of UK-based demand as the concept becomes more established over here.
“Businesses contributing high-quality, sustainable accommodation are likely to find few political barriers in their way but will need to be conscious of the views of local stakeholders, who are keen to protect the community feel for their area,” Jamie Cater, GK’s head of strategy, said.
“Young professionals are increasingly attracted by accommodation that includes all utilities, as well as onsite gyms, libraries and other facilities, in one all-inclusive package. Some providers even offer a weekly linen change for occupants too busy to do it themselves. Successful brands have shifted from providing a traditional product to a fully-serviced experience.”
Stephen Byfield, GK Strategy’s chairman, added: “It’s ‘WeWork’ for housing and it looks set to catch on fast. So clever, so inventive, so investable.”